The consolidation story in American food does not begin at the supermarket. It begins at the seed. Two companies, BASF and Bayer, the latter having acquired Monsanto, control a commanding share of the global seed market for major commodity crops. The seeds that grow the corn that feeds the cattle and chickens and hogs and fills the ethanol tanks and sweetens the processed food are largely controlled by two companies. Before the food enters the supply chain, the supply chain is already highly concentrated.
Add the fertilizer market, where three companies dominate nitrogen, phosphate, and potash, and the equipment market, where two companies, Deere and CNH Industrial, account for the overwhelming majority of large farm equipment sold in the United States, and you have a picture of the input side of American agriculture that is almost invisible in public discussion. The farmer is nominally independent. The farmer buys seeds and fertilizer and equipment in markets with very few sellers. That is not the same as operating in a competitive market.
On the output side, the consolidation story in beef processing is the one we covered a few weeks ago: four companies, eighty-five percent of processing. Pork and poultry are similar. Grocery retail is more competitive at the store level but increasingly dominated at the distribution and procurement level by a small number of buyers who have leverage over both producers and consumers.
The farmer in the middle of this system is squeezed from both directions simultaneously. Input prices set by concentrated sellers. Output prices set by concentrated buyers. The farmer is the most visible and most vulnerable actor in a food system that increasingly extracts value at every point except the farm gate. That’s the food system. The farmer is the face of it and among the most squeezed by it. Every step between the seed and the shelf, from fertilizer to equipment to the processing plant to the distribution chain, is a toll booth.